U.S. Considers Funding Part of Congo’s $12 Billion Inga Dam

Dec. 16 (Bloomberg) -- The U.S. may consider partly
financing the Democratic Republic of Congo’s $12 billion Inga 3
hydropower project, Rajiv Shah, the head of the U.S. Agency for
International Development, said.

Congo must commit to reforms that include reorganizing its
public-utility company and creating a governance structure for
Inga to attract financing before the U.S. can look into
investing, Shah told reporters today after touring the site.

“The reforms we want are those that provide confidence to
private investors to be part of the financing package for the
Inga 3 program,” Shah said.

Since U.S. President Barack Obama announced his $7 billion
Power Africa commitment to increase access to electricity on the
continent in June, a number of countries have asked to be part
of the program, Shah said. Congo was not included in the
original Power Africa list of six sub-Saharan countries.

The world’s largest economy is working with General
Electric Co. and other companies to add 10,000 megawatts in sub-Saharan Africa in the first five years of the program. Companies
will contribute about $9 billion. More than two-thirds of
Africa’s population don’t have access to power.

Shah toured the Inga site today with Prime Minister Matata
Ponyo, Energy Minister Bruno Kapandji and World Bank officials.
The 4,800 megawatt project on the Congo River is the next step
in developing the Grand Inga site, which may eventually become
the world’s largest hydropower producer, according to Congo’s
government.

Important Engagement

“What’s important is not just the envelope with such an
amount of money, it’s the engagement” of potential partners,
Matata said. “This constitutes a key moment to say that we are
all behind this project and this project must move forward.”

Two previous attempts to build Inga 3 in the past four
years have failed.

South Africa will receive 2,500 megawatts of power, while
copper miners in Congo’s Katanga province will take 1,300
megawatts once Inga 3 is completed. The remaining 1,000
megawatts will be for domestic use. Grand Inga will churn out
more than 40,000 megawatts of power through eight separate dams.

The current groups of companies bidding to develop Inga 3
include China Three Gorges Corp. and Sinohydro Corp.; Posco and
Daewoo Corp. of South Korea in partnership with Canada’s SNC-Lavalin Group Inc.; and Actividades de Construccion y Servicios
SA and Spain’s Eurofinsa SA.

Jin-Yong Cai, chief executive officer of International
Finance Corp., the World Bank’s private investment arm, said
Congo’s government should continue carrying out changes to
improve the business climate. The IFC halted all new investments
in Congo after the government in 2009 canceled the contract for
a copper project in which it had a minority stake.

“But what we have seen is really renewed focus and
commitment from the government in recent years in terms of the
doing business environment,” he said.